What is a ‘will’? Is it the same as a ‘last will and testament’?

A Will is a written document, generally prepared with the help of an attorney, which provides instructions for the disposition of a decedent’s (dead person’s) property. The term “Last Will and Testament” is simply a more complicated name for a Will.

Who should have a will?

Anyone who cares how his/her property is distributed upon his/her death, or who would handle matters for those she or he leaves behind, or be guardian for minor children. After all, “you can’t take it with you”.

Does a will cover all my property?

No. A Will does NOT cover all of what you may consider to be “your property”. For example, if you own pension plan assets, or 401(k) plan assets, or life insurance, or annuities, or property held through a “Trust”, such property and benefits would typically pass to the specific beneficiaries you have named with the manager of the pension plan, the company sponsoring the 401(k), each life insurance company, each annuity company, and in the Trust. Of course if the beneficiary of such assets is simply named as “my estate” then the Will would control who gets the property and benefits — although this very often creates bad tax consequences and major delays and expense for your beneficiaries.

What is probate?

Probate is the process by which legal title of property is transferred from the decedent’s estate to his/her beneficiaries. Since you can’t take it with you, the court determines who gets it.

If a person dies with a Will (“testate”), the probate court determines if the Will is valid, hears any objections to the Will, orders that creditors be paid and supervises the process to assure that property remaining is distributed in accordance with the terms and conditions of the Will.

If a person dies without a Will (“intestate”), the probate court appoints a person to receive all claims against the estate, pay creditors and then distribute all remaining property in accordance with the laws of the state. The major difference between dying testate and dying intestate is that an intestate estate is distributed to beneficiaries in accordance with the distribution plan established by state law; a testate estate (after payment of debts, taxes and costs of administration) is distributed in accordance with the instructions provided by the decedent in his/her Will.

The cost of probate is either set by state law or by practice and custom in your community. The typical cost to probate an estate is in the range of 3% to 7% of the total estate value.

What can happen if I do not have a will?

If you die without a Will, you have died in testate. Your property must go through the probate process in order to have the legal title to the property transferred to your heirs at law. Your heirs at law are defined by applicable state statutes. The law of the state where you live controls the distribution of your personal property.

The rules for determining who gets property distributed from an in testate estate have many variations. Subtle differences between the rules states can have a material effect on who inherits when there is no Will.

An example of an in testate estate distribution rules, taken from the community property state of California, is:

If married, the spouse gets 100% of the community property, but only one-third or one-half of the separate property left, as children, parents, and any issue of children or parents, can share in the distribution.

If not married (this includes widows and widowers), the property is distributed to relatives in the following order:

(1) All to your issue – your children, grandchildren, great-grandchildren, etc., if there are any. If none, then,

(2) All to your parents (equally), or to the surviving parent, if any. If none, then

(3) All to the issue of your parents (your brothers and sisters, then your nieces and nephews, etc.). If none, then

(4) All to your grandparents (equally) or the surviving grandparent, or the issue of your grandparents (your aunts and uncles, then your cousins, etc.). If none, then

(5) All to the issue of any predeceased spouse (your step-children). If none, then

(6) All to your next of kin. If none, then

(7) All to the parents of a predeceased spouse (your mother- and father-in-law), or the issue of the parents of the deceased spouse (your brothers- or sisters-in law). If none of the above exist, then

(8) All to the State of California

In addition, in common with many other states, California has many special rules that apply to widow/widowers, half-siblings, children born out-of-wedlock, foster- and step-children.

The rules for in testate estates are very technical. The simple alternative is to control how your property is to be distributed, by preparing a valid Will.

When should a will be prepared and signed?

A Will needs to be prepared and properly executed (signed by the principal and witnesses) while you still have legal capacity.

Thus, anyone who wants a Last Will and Testament should have one prepared, and sign it in accordance with the applicable state law while s/he is healthy and has full control over his/her mental functions. If you wait until an accident or an illness strikes, it could be too late.

Why not wait until I am very ill?

We all put things off until tomorrow, but in the case of a Will, procrastination can be potentially disastrous and have major consequences. First, many people don’t know when the end is coming. It just happens in an instant, perhaps in an auto accident or plane crash, or with a sudden heart attack. Even if a person gets a critical illness, he or she may be reluctant to prepare a Will fearing doing so will be a jinx. Of course illness or stroke, or medicine to relieve pain, may preclude a person from making a valid Will.

I want to update my will. How do I go about it?

There are two basic choices, and professional assistance is in order for both:

(1) You can prepare and properly execute a new Will that revokes the earlier Will, or

(2) You can prepare and properly execute a Codicil to the Will. (A Codicil is a separate document that adds to and/or replaces one or more provisions in an existing Will.

The approach that makes sense depends on the specific facts and circumstances. For example, there are sometimes tax provisions that grant a preference to provisions in old Wills, but not new Wills. Or there may be a possible question about your mental competence. In such a case a Codicil would generally make sense.

While Codicils were often used in the past, now lawyers use word processing programs which are able to quickly integrate any changes you want to make — even minor revisions — into a new Will that is up to date. The fee for such revisions is typically very modest, and the lawyer can suggest other possible revisions to take account of new statutes, tax regulations and changes in circumstances that you may have overlooked.

MAJOR WARNING. NEVER TRY TO MAKE CHANGES IN A WILL ON YOUR OWN! Writing in the margins, crossing out words, lines, or sections of the original Will invites confusion, potential ambiguity, and likely nasty and protracted Will contests.

Are ‘death-bed wills’ valid?

Although a hastily-drawn “death-bed” Will may be just as valid and binding, the closer to the death the Will is prepared the more likely it is to be challenged by a disappointed beneficiary. That could lead to a costly, protracted and family wrenching Will Contest, discussed later in this article, on the grounds that the person lacked mental capacity to make a Will or was subjected to undue influence.

A last minute Will also raises the potential hazard that hasty preparation may lead to errors, that the Will may not distribute the property in the manner that the person really wanted, or failed to take advantage of some features that can dramatically reduce the Federal Estate Tax, or that the Will would be found invalid because it does not conform to some legal requirement. “Haste makes waste” could cause your family heartache and major expense.

What is a ‘holographic’ last will and testament?

Some states allow you to hand write your Last Will and Testament. However, state law can be very particular with respect to holographic Wills; for example, California requires that all material provisions be written entirely by hand, and that the Will must be signed by the person making the Will.

Sometimes a holographic Will is better than no Will at all, sometimes it is not. If the holographic Will creates an ambiguity or an unintended result, then it would have been better to have no Will at all.

Is an ‘oral will’ valid?

Because of the possibility of fraud or misunderstanding, generally an “Oral Will” is only recognized when made by members of the military or merchant marine in active service in time of conflict, when the person making the Will does not have time to prepare a written Will and have it properly executed. In most other circumstances, to use the old joke, “An Oral Will is not worth the paper it is printed on.”

In fact many states have laws requiring promises to make or change a Will, or not to make a Will, be done in writing. Our advice is NEVER RELY ON AN ORAL WILL OR ORAL AGREEMENTS OR STATEMENTS ABOUT A WILL OR TRUST. Get it in writing, preferably with legal counsel to assist you.

Should I write my own will?

No. A Will is a critically important legal document. IF YOU DIE YOU WILL NOT BE AROUND TO EXPLAIN WHAT YOU INTENDED. A Court will have to interpret your Will.

Anyone who thinks she or he would be better off without the self-prepared Will can contest it. If it does not meet some very stringent tests it can and will be disregarded. The costs of litigation can — and too often do — wipe out an estate.

What about form books and computer programs?

Most forms in books are terrible. If they are not adjusted for the laws of your state — and most do not even purport to be — they may be totally off base for you. Even if they are supposedly tailored to residents of your state, very often they are not. Most computer programs are not much better when used by a non-lawyer. Just look at the huge disclaimers they put on the box or in the instructions. If something goes wrong, your heirs are out of luck.

If you want to do it yourself, DON’T. If you insist, you may want to take a look at the site of Will Works, but we urge you to contact a lawyer and not even try to do it yourself — with or without the help of a form book or program or document preparation service.

What about books on estate planning?

As you begin the process “caveat emptor” (let the buyer beware). There is a lot of information out there; while some of it is very good, some is misleading at best. There are many “over-the counter” guides to estate planning available at bookstores. Some are pretty decent, most are awful. If you are planning to do it yourself, be prepared to spend a fair amount of time on this project.

What about software programs?

Unlike the fill-in-the-blank forms, GOOD software programs ask most of the questions lawyers would ask, and tailor the Will to the answers given. However, far too many software programs are poorly designed, overly complicated, or overly simplistic.

With overly complicated programs, it is easy to make a mistake and create errors and excess levels of complexity in your Will. Simplistic programs are no better than the fill-in-the-blank form and any alterations can make it worse.

One of the best uses of software programs is to help you understand the process and get your thoughts in order before visiting a lawyer. Among the better software programs on the market are those produced by Broderbund (Family Lawyer) and Nolo’s WillMaker.

Just as with fill-in-the-blank forms, the biggest problem with Will software programs relates to execution of the Will and the potential difficulties and expenses getting it admitted to probate.

What about ‘fill-in the blanks’ forms?

They should carry an Attorney General’s warning.

Some thoughts to keep in mind before filing out “fill-in-the-blanks” forms:

(1) Fill-in-the-blank forms vary widely. Too many are just plain awful.

(2) Even if the fill-in-the-blank form is tailored to your state, it will likely not meet your personal requirements. The forms usually are designed for people with very limited assets and no potential for litigation (such as a family that will go along with anything the person decides, even if it “cuts out” some family members). Fill-in-the-blank Wills are not right for families who have special circumstances, such as owning an out-of-state vacation home, or having a disabled child or grandchild, or a beneficiary who has received public assistance, etc.

(3) Fill-in-the-blank forms rarely deal with possible Federal or state estate taxes, or their impact if both spouses die at or about the same time. As Federal estate taxes are from 7% to 50% of your total estate, and start at $675,000 for persons dying in 2000 (that limit increases to $1,000,000 in 2002 and will be at $3.5 million by 2009) that can take quite a bite out of your estate. And for Federal estate tax purposes the value of your estate is not only the property you own that passes by Will, it also includes property that passes by joint tenancy, plus the face amount of all life insurance, plus the value of your IRA, 401(k) and other retirement plans which typically pass under beneficiary designations and not the Will. Thus, instead of having a coordinated estate plan, use of a fill-in-the-blanks form could divide your assets in proportions that you (and your beneficiaries) would regard as unfair while penalizing them with major tax consequences.

(4) Even with the best possible fill-in-the-blank forms, the crucial step most likely to be messed up is the execution of the Will. A Will is not valid unless “properly executed” in accordance with the laws of your state of residence (or the state in which it was made). Some states require that in order to make a valid Will there must be three witnesses, all present at the same time who see you signing the Will, who then sign it immediately afterwards as witnesses. If even one of the necessary witnesses was not present, the Will would not be valid. If one of the witnesses is also a beneficiary, that witness may be disqualified from taking anything under the Will.

(5) Fill-in-the-blank form Wills typically take longer to probate because judges frequently question the process used in their execution, requiring the witnesses who saw you sign the Will to appear in court. That creates expense, delay, and added legal bills. And if any person who would benefit if the Will is thrown out starts a “Will contest”, if the Will were not properly signed and witnessed, it would not be admitted to probate. In other words, you may think you prepared a valid Will, but it would not be worth the paper it is written on, and that would not be known until after your death.

What is a ‘pour-over will’?

A pour-over Will is a particular type of Will used in conjunction with a Trust. Most people intentionally don’t put all their property into the Trust, sometimes for convenience (such as a car — some states and insurance companies seem incapable of dealing with vehicles held in a trust) or other times for tax reasons (it may be Subchapter S stock that often does not fit well in a Trust, or real estate and they don’t want to risk triggering a property tax re-assessment). Most often people forget to put newly acquired property into a Trust on an on-going basis.

To prevent the creation of an intestate estate, a pour-over Will is created to catch any property which had been (intentionally or inadvertently) left out of the Trust at the time of your death. By the terms of the pour-over Will, the property that it catches is distributed to the existing Trust.

Whenever a Trust is used, it is essential to also have a pour-over Will to catch your property which was not held by the Trust, not held in joint tenancy, or subject to other contractual arrangements at the time of your death.

How much should it cost me to have a lawyer prepare a will or a trust for me?

Asking how much a Will or Trust costs is much like asking how much a house costs. There is a wide range between a tiny cabin in rural Montana and the castles of the rich and famous in Beverly Hills or on Park Avenue.

Generally, the cost of a Will or Trust will depend on:

(1) The amount of legal time and skill your circumstances will require. For example, doing a Willl and Trust for a billionaire with numerous categories of property and a complicated family situation, such as children from several marriages, is likely to require far more time and effort and skill than doing a “simple Will” leaving a modest bank account to one’s spouse.

(2) How well you have thought out your wishes. When you get to the lawyer’s office, you should have a general idea of what it is you would like done. The lawyer thus can help you through any hazy areas, suggest alternatives and point out any problem areas.

(3) The type and nature of your assets. For example, if all that billionaire owns is publicly-traded stock held in one account at one brokerage firm, and she wants to keep on owning it, relatively little time would be needed by the lawyer to plan to deal with the assets. On the other hand, if she or he holds a bunch of real estate located in different states, oil and gas interests, patent rights, non-publicly traded stock, several partnership interests, owns several private businesses, has a 401(k) plan and IRAs, and was the beneficiary of several family trusts, dealing with that variety of property would usually take a lot more professional time.

(4) The total value of your assets. It’s usually not that the lawyer figures you can afford more, but because the more assets you have, the more tax planning you’ll likely need. Also, the more you have, the greater the potential liability the lawyer assumes if she or he makes a mistake.

(5) How anxious you are to reduce or minimize potential Federal Estate Tax, and depending on where you live and hold property, possible state and local estate and inheritance taxes. For example, you can leave an unlimited amount to your spouse, and also can leave a total of $1,000,000 free of Federal Estate Taxes to others. (That assumes you have not made certain lifetime gifts (starting in 2002) of more than $11,000 per individual per year — $22,000 if your spouse joined in the gift. The $1,000,00 amount increases slowly to $3.5 million in 2009; in 2010, it is repealed entirely, but the repeal only lasts one year at which time it will be reinstated to the way it was before the law was enacted.)

(6) If you have a large estate, and the type of assets you hold are appropriate, setting up a Family Limited Partnership might significantly reduce estate taxes, but would increase the cost of the project.

(7) Whether you are also looking for protection from possible future claims of creditors–which may involve the use of various US and foreign partnerships and trusts for your assets.

(8) How unusual your bequests are. For example, if you intend to cut out the natural objects of your bounty (your spouse, children, grandchildren and other relatives) and instead leave everything to a caregiver or a cult, it would take a lawyer lots of extra time to make sure you have all your marbles and to plan to make the Will as safe from attack as possible.

(9) How detailed you insist on in terms of the property you would leave behind. For example, if you insist on designating a separate beneficiary for each and every item you own — the big pot to Bill, the yellow frying pan to Susan, etc. — that takes lots of extra time and is lots of work.

(10) How much of a hurry you are in. If the lawyer must drop everything else to handle your Will, it may cost a bit more.

(11) Your health — mental and physical. If it’s very bad, that would require some extra effort to minimize the likelihood of any challenge.

(12) Where you are based — and how good a lawyer you want. It often costs a bit more for a top lawyer in a major city than in a small locale. A highly experienced lawyer often charges more than an inexperienced lawyer. However, in most estate planning matters, the lawyer’s fee is almost meaningless compared with the amount your heirs might save in estate taxes and probate costs, not to mention the hassle you can reduce for those who you’d leave behind.

(13) Whether the lawyer expects s/he’ll ever get any more work from you, your family, or your estate. If it is a one-shot matter, you’d likely pay more.

Doing a Will or Trust is NOT a “Do It Yourself” project. Consult an experienced lawyer. While you should always ask the fee, it makes little sense to shop for any professional service based solely on price.

Does it make sense to use an attorney? Is it expensive?

Only a Wills attorney who regularly practices in the fields of wills, trusts, probate and estate planning is able to provide you with really sound legal advice as you put your estate plan into place. Attorneys are subject to regulation by state bar organizations, many of which have continuing education requirements and mandatory liability insurance in case the lawyer makes a mistake.

When you speak with an attorney, you can get answers to your questions — including how much it would cost.

Often the expense incurred in retaining an attorney to prepare and help you put an estate plan into place is worth hundreds of times what you and your family would pay with no planning or poor planning. It would also avoid the financial and emotional nightmares that can occur with a poorly drafted (or improper) plan.

How long is a will valid?

A validly prepared and properly executed Will is valid until you intentionally revoke it or prepare and execute a new Will that revokes the previous Will. In addition, a change in marital status, such as a divorce, also may impact provisions in a Will and/or beneficiary designations.

What is the difference between a will and a trust?

A Trust is a way of transferring your property to an artificial legal entity or “person” before your death, while still having the use and/or control of it during your lifetime. As the Trust owns legal title to the property in it at the time of your death, and the Trust does not die with you, the property does not have to go through “probate”. Probate is the legal process which inherited property goes through to transfer the title to the beneficiary. If you have a large estate, or even a small estate with real property (i.e. real estate), it is often advantageous to set up a Trust, as it usually ultimately is far less expensive. A probate lawyer can help you decided whether a Will or a trust is best for you and your estate.

What are self-probating wills?

A so-called “self-probating Will” typically has affidavits of the witnesses who saw the deceased sign the Will attached to the Will. In those affidavits, the witnesses say that they saw the deceased execute or sign the Will, the deceased asked them to be witnesses to the Will, he or she appeared mentally competent at the time, and acted voluntarily (not out of fear, intimidation, or coercion). Without such affidavits, it would typically have been necessary for the Executor (or a lawyer for the Executor) to round up the original witnesses and have them come into court (if possible) to state the circumstances surrounding the execution of the Will, or at least give an affidavit, even to be able to file the Will in the court for probate.

The affidavits help authenticate that the Will is genuine. Courts generally allow the Will to be filed with the affidavits, without the need to get witnesses or new affidavits. They then give notice to other heirs at law who can object to the Will being admitted to probate.

With self-proving affidavits, only if anyone choses to challenge the Will in a Will contest, is the probate court likely to require witnesses to come into court (if they are still available) to testify about the circumstances in which the Will was signed.

In some states, self-authenticating affidavits are not accepted where the death occurs shortly after the Will is signed, or the Will was not executed under the guidance of an attorney.

What is the effect of a divorce on a will?

It depends on your state’s law. In some states, a divorce decree automatically revokes your entire Will and in others, it revokes only those provisions that made gifts to the former spouse, not the Will itself. Either way, any property arrangements in a Will (or other document, such as a life insurance policy, bank account) should always be reexamined when you contemplate a divorce. Frequently, these matters may be required to be addressed as part of any divorce agreement or court decree.

Suppose a person is mentally competent at the time of making a will but subsequently loses it. Is the will still good?

Yes. The fact that the person making the Will loses it or has weakened mentality sometime after the Will is made has no bearing. It only becomes important should the person having an unstable mind want to change the Will at a later date.

What is the effect of senility on a will’s validity?

Don’t think that just because the deceased wasn’t as sharp as she used to be, or that because he was old and forgetful, it is sufficient to getting a Will thrown out as invalid. The person seeking to have the Will accepted for probate generally has to establish that the deceased was of sound mind and memory at the time the Will was executed. As you might expect, the people who served as witnesses when the Will was signed almost always say the deceased was of sound mind, knew where he was, what the day was, who his family members are, and knew that he was signing his Will. Then the burden often shifts to the person challenging the Will to prove it should not be admitted to probate.

It can be very difficult, and costly to prove that the deceased was mentally incompetent, or made a mistake, or was subject to fraud, coercion, duress, or undue influence when he or she was making the Will.

What is a ‘living will’?

A Living Will is the popular name for a document spelling out the general kinds of medical care you would want–or not want–in the event you became unable to communicate with your health care providers. Other names for a Living Will are a “medical directive” or “medical declaration”. It does NOT impact who gets your property or who is your Personal Representative or Guardian of your minor children. For details, please see our section on Elder Law.

What effect does moving to a different state have on a will?

A Will that is properly made and properly executed in your former state of residence, that would be valid under the laws of your former state, will almost invariably be regarded as valid by the laws of your new state. However, as the laws of all states differ, if you move it makes sense to have your Will reviewed by a lawyer in your new state.

For example, sometimes the new state has different processes to “prove” the Will. Or the new state may permit probate matters to be handled on a less formal and less expensive basis, simply by adding to the Will reference to certain specific statutory provisions in the new state’s laws. Occasionally complications arise because different states have different classifications of property. For example, if your Will was executed in a state that does not have a community property system and you move to one of the 9 community property states, you may wish to get in touch with a Wills attorney to determine whether your Will should be redrafted to achieve your intended result.

If I have a living will, would I also need a real ‘will’ or a ‘living trust’?

Yes. A “Living Will” has absolutely nothing to do with managing or controlling your property either during your lifetime or at your death. It deals only with health care options.

Can I disinherit my spouse?

Not completely, unless you and your spouse have waived the right to be included in the other’s estate in a prenuptial or postnuptial agreement. Each state has laws that shield a surviving spouse from being completely cut off.

In most states, the surviving spouse can choose between the property left in the deceased spouse’s Will or a statutory share set by state law (usually one-third or one-half of the estate). Whether it is advantageous to elect the state’s share – generous in some states, minor in others – depends on the rules for calculating the elective share, which rules and exceptions have a remarkable number of variations between the states.

In a community property state, the surviving spouse already owns half of the community property at the death of the other spouse.

Can a parent disinherit a child?

Generally Yes. To do so, it is necessary to specifically say in the Will that the omission is intentional. Often Wills have language along these lines: “I have previously taken care of my daughter Susan during my lifetime, and have chosen to leave nothing to her in this Will. Similarly, I am leaving nothing to my son John, for reasons known to both of us.”

If a child is a minor, the states do provide an allowance to support the child until they reach the age of majority, typically age 18.

What reasons are there to change or update a will?

Typical reasons for changing or updating a Will are:

(1) You marry or divorce

(2) Birth or adoption of child

(3) Death of a family member or beneficiary

(4) Changes in the Federal Estate Tax laws or State Tax laws

(5) Substantial change in the value of your estate

(6) Change in the nature of your property holdings – for example, if your Will leaves the farm to a son, and the ranch to your daughter, and half the balance to your son and daughter, and then you sell the farm, your daughter would wind up with more (the whole ranch plus one half of everything else) than your son (who would get only one half of the balance).

(7) A Guardian or Executor or Trustee moves away, dies, or is no longer willing or able to serve

(8) Your children are no longer minors, or are old enough to handle financial matters on their own

(9) You move to another state

(10) You wish to eliminate gifts to certain beneficiaries

How can I revoke a will?

If you are mentally competent, you can revoke a prior Will by destroying it, obliterating it, burning it, or tearing it up. Of course, unless the act of revocation is properly witnessed and recorded, someone may later contend the Will was simply “lost” and not revoked, or that you lacked mental competence at the time you “attempted” to revoke your Will. This could give rise to a “Will Contest”.

A change in your marital status may revoke part of a Will relating to your former spouse.

What are will contests?

A Will Contest is a type of litigation challenging the admission of a Will to probate. As discussed in detail in our section on Probate, a person cannot challenge the validity of a Will simply because she does not like its provisions, or did not, in her opinion, get what she wanted. Tests on the validity of a Will are not contingent on the elements of “fairness” or the reasonableness of its provisions or on the timing of disbursements (such as if you want it now, and the Will says you get it at age 50).

A Will is likely to be attacked by those who assert that a person lacked mental capacity (senile, delusionary, unsound mind) at the time the documents were created, that the Will maker was subjected to fraud, coercion or undue influence during its creation and implementation, that there are ambiguities in the document, or the Will is a forgery or does not conform to legal requirements as to the number and nature of the witnesses.

If the Will is thrown out, the court may disallow only the part of the Will that was challenged or throw out the entire Will of the decedent, distributing the property as if the person died without a Will, or use the last previous Will, depending on state law and the specific facts and circumstances.

Suppose that I am afraid someone might challenge my will. How can I ‘bullet proof’ it?

First, a Will is such an important document that you’ll want to have a lawyer help you draft it, even if you do not fear someone may challenge it. You’ll want to make sure it does what you want it to do, without ambiguity, with the lowest expense possible when it comes time for probate, and that it helps you and your family avoid or minimize taxes. That’s what good lawyers do.

Second, if you tell the lawyer you suspect challenges, they’ll work extra hard. They may ask a physician to evaluate your mental competence — and perhaps serve as a witness when you sign it. They may videotape your execution of the Will. And they may put in provisions that would result in anyone challenging the Will to increase his or her share getting nothing at all should the challenge fail.

My brother who was left out of dad’s will is challenging it. We want to settle before more anger, nastiness, and resentment sets in. What can be expected in a settlement?

In a settlement, instead of getting nothing, and having to pay his or her own legal bills, the cut-out heir would get something, deplending on the size of the estate. If the estate were not huge the cut-out heir might take the lesser of $10,000 or 10% of the net estate. While that’s 40% less than the 50% of the net estate (less the legal fees) one he or she would get if the contest were successful (less his or her own legal bills) if there were only 2 heirs at law (such as if only 2 kids and no spouse or surviving children of a deceased sibling), it is far better than a stick in the eye if the Will were NOT thrown out.

Apart from what the Will says, in many families a parent can vacilate between kids, changing the Will repeatedly with one favored, then another, etc. It thus becomes a matter of change who was “in” and who was “out” at the time of death. In such cases, even if lack of mental competence cannot be proven, the “moral” settlement may be something far closer to a 50-50 split, or even 50-50, regardless of what the Will says.

My brother was intentionally left out of dad’s will because of some past happenings. Now with our dad’s death, he is going to contest the will. What’s going to happen?

Nearly all people left out threaten to contest the Will. But as there must be a real legal basis for the contest (and bringing the action is expensive), few actually do, and nearly all of those who do, wind up losing if it goes to trial.

The funds in the estate are used to pay the expenses of the proceeding on behalf of the estate, and depending on the EXACT facts, the contest may be costly to the estate. (The contestant bears his or her own expenses.) Thus, very often a settlement is made to spare the estate the costs, delay and intra-family unpleasantness.

When should a last will and testament nominate a guardian and what role does a guardian play with respect to minor children?

A Guardian is the person who is responsible for the health, education and welfare of minor children. Technically there is a Guardian of the Person and a Guardian of the Estate of minor children (usually the same person serves in both roles). The Guardian of the Person has responsibility for decisions regarding the health, education and welfare of the minor child, and the guardian of the Estate is responsible for the child’s property and for handling all financial matters for the minor child.

When one parent dies, generally the other parent is appointed as the Guardian for minor children, whether or not the parents were married at the time. If someone besides the other parent of a minor child is nominated as Guardian, the other parent can contest the nomination. It is then necessary for the court to determine that the appointment of the other parent as the guardian would be detrimental to the best interests of the minor child (which is a very heavy burden of proof to establish).

In the event of the deaths of both parents, however, it is important to have a Guardian for minor children named, to ensure that the children Will be well cared for by someone the parents trust.

What role does the personal representative play under a will?

he Personal Representative of your estate (also commonly referred to as an administrator or executor) is responsible to gather and inventory all of your property at the time of your death, determine all your outstanding debts, pay all of your legitimate debts and then distribute the remaining property in accordance with the instructions provided in your Will.

The Personal Representative is appointed as part of the probate proceeding and has the responsibility for guiding your property through the proceeding, subject to established probate rules and procedures. In many states, the court has a considerable amount of control over the activities of the Personal Representative, and prior permission of the court is required for the Personal Representative to take action with respect to property in the probate estate.

Since your Personal Representative is given access to all of property in the probate estate, the selection of a competent and trustworthy person is very important. It is wise to nominate someone who has business experience, intelligence, and the utmost integrity and honesty to serve as your Personal Representative. Your nomination of Personal Representative, (along with Alternates who are asked to serve in the event that the prior nominee is unwilling or unable to act), should appear in your Will. This is your chance to tell the court who you think is best to do this job for you (since you can’t speak to the court in person).

Most states require the Personal Representative to post a surety bond covering his/her actions. This requirement can be waived if your Will states that you want your nominated Personal Representative to serve without bond.

What does a will usually contain?

Typical provisions of a Last Will and Testament include:

(1) name of the testator (your name)

(2) name of the testator’s spouse and date of marriage, if any

(3) name of all of the testator’s children (and how foster and stepchildren are to be treated), if any
v (4) revocation of all prior Wills

(5) special gifts, if any
v (6) distribution instructions for the remainder of the estate after payment of just debts, taxes and expenses incurred in administration of the estate

(7) nomination of the Personal Representative and alternates

(8) powers that are to be given the Personal Representative (often defined as those provided under state statute), and

(9) waiver of the surety bond requirement

Can a will reduce estate taxes?

A Will alone does not necessarily reduce Federal Estate Tax. However, as such taxes begin at 37% and reach 45% in 2007–2009, and are the highest in the federal tax arsenal, estate planning can often take advantage of tax avoidance techniques that would not be available to your family if you die without a Will. Unless you want to make Uncle Sam a major beneficiary of your estate, you’ll want to have at least a Will.

Does a will change named beneficiaries for life insurance policies, pensions, and similar accounts?

No. No matter whom you’ve chosen as beneficiaries in your Will, the person or persons you have properly designated as the beneficiary(ies) of your life insurance policy, a payable-on-death bank account, an IRA, or 401(k) or other retirement plan — typically by filing the beneficiary designation with the company or plan sponsor — governs.

I was told by my accountant to exclude my grandchildren from my will because they would be subject to a generation-skipping transfer tax. Was my accountant correct?

The generation-skipping transfer tax (GST) only applies after $1,060,000 million (in 2001) or more is transferred (whether during a person’s lifetime or at his death) to grandchildren whose parents are alive and bypassed. (GST tax drops to $1,000,000 in 2002 and thereafter increases to match the estate tax exemption levels in effect during the calendar year. The GST is abolished in 2010 but reapplies in its entirety in 2011.) In estate planning matters, it is best to consult a lawyer.

I owed a debt to a friend of mine who recently died. Do I still owe the money to the heirs, even though my friend died without a will?

You still owe the debt to the individual’s estate. The obligation to repay does not die with the creditor or no one would ever lend money out on the risk that if they die it’s a gift to the borrower.

If there was no Will, a survivor, usually one who would inherit in the absence of a Will, would have to go to court and seek to be appointed Aministrator of the deceased’s estate, make a demand on you and if necessary, sue you in the name of the estate to collect. Who knows, the deceased also may have owed others money and so anything you pay in would essentially go to the estate’s creditors.

If you knew there were say only 2 surviving children and no claims, you could work out a deal to pay the 2 kids a portion of the amount owed, and avoid their need to file for probate, assuming they would otherwise not have to go through that expense. You’d explain there are risks to you in paying them, should other creditors turn up, that becasue of that risk you would expect a discount, and still insist they agree to indemnify you should there be other claims (such as from the deceased’s creditors, other heirs that may become known in a Will you all are unaware of, or tax authorities) to the money you pay them.

The bank holding my deceased mom’s Certificate of Deposit [CD] will not distribute the funds to her estate without her will being probated. Can the bank require my family to go through that process?

What looks like a Will, says it is a Will, and feels like a Will, is not necessarily valid, nor the last Will or that there may not be creditors that come up out of the woodwork or taxes payable. The probate process is what is used to “prove” the document is in fact her last Will, there are no challanges to it, and any claims against the estate are adjudicated under court supervision.

If the account was solely in her name, it now is the property of her estate, and only the executor named in a Will after the appointment is confirmed by the probate court, or a Personal Representative of her estate designated by the probate court, has rights to the money. Further if the bank paid a beneficairy and any creditor did not get paid, or any Federal estate tax was not paid, the bank could be held liable to the creditors/tax authorities if it did anything else.

In some cases it is true an institution may waive the requirement that it be probated IF the beneficiary is the principal heir at law, all other possible heirs at law have signed waivers and authorizations to pay the money to the beneficiary, and have agreed to indemnify the bank should any claims be made. But that’s the exception, rather than the rule for nationally operating institutions.